The stable outlook of these credit ratings reflect KRE’s balance sheet strength, which AM Best categorised as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.
KRE’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio is assessed as strongest, which AM Best expects to remain stable over the medium term, according to a statement.
As a listed company on the Korea Exchange, the company demonstrates a high level of financial flexibility, which is proven by a track record of successful capital raising through the issuance of hybrid bonds in overseas and domestic capital markets.
Its conservative approach to asset allocation remains supportive of the company’s current balance sheet strength assessment, although loans and alternative investment holdings have increased.
KRE’s operating performance is assessed as adequate, underpinned by a five-year average combined ratio of 98.9 per cent and return-on-equity ratio of 6.8 per cent, holding a large book of personal line proportional treaties, which accounted for more than half of net premium written last year.
With more than 60 years of directly working with primary insurers in South Korea, the company benefits from its strong relationship with domestic clients, profound market knowledge, and an immense amount of data it accumulated for better pricing and risk management.
AM Best is a global credit rating agency, news publisher and data provider specialising in the insurance industry. More information at http://www.ambest.com.
-- BERNAMA
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